Final Fantasy Online director defends monthly subscriptions in the golden age of free-to-play (exclusive)

As part of our larger interview with Final Fantasy XIV game director Naoki Yoshida, we asked the opinionated developer how Square Enix justifies a monthly subscription for its upcoming MMO relaunch. After all, most similar games have thoroughly embraced a free-to-play model, and those brazen enough not to, such as Star Wars: The Old Republic, quickly course-corrected after subscriptions and active players take a massive dive within the first couple of months.

Yoshida’s explanation, given through a translator, is a lengthy but interesting one, describing the mindset within a major corporation such as Square Enix as well as discussing his thoughts on titles like World of Warcraft and The Old Republic:

Quote:

There are many different types of MMOs. There are two big types or groups that we see. You have one group with games like your Rift or your Star Wars, which are very large-scale MMOs with established IP. Then you have your smaller MMOs, which are maybe new IPs that don’t need as big a user base to be successful. So we can start off with the big group, the large-scale MMO group, with your Rift, your Star Wars, your Guild Wars, your Age of Conan and The Lord of the Rings. These games all started out on a subscription model, or were planning for a subscription model when they were in development. Then, partway through, they switched to free-to-play.

Then again, you have games like Rift and Star Wars. Even though people have been saying that yes, there is this change in the market, everything’s moving to free-to-play, they still – up until recently – were developing a system that would be subscription-based. Even though everyone is saying the industry is going free-to-play, they still were developing these huge games with subscriptions in mind. Again, we’re not saying that one is better than the other, that free-to-play is better than subscription or subscription is better than free-to-play. But for a large game on that scale, what’s most important – more important than making a lot of money – is making a stable income, a stable amount of money over a long period of time. And so to develop a large-scale MMO like this, you need to spend a lot of time with a lot of resources and a lot of staff to make this game.

To do that, you need a lot of money, and to get a lot of money to do that, you usually need investors to invest in your game. Because you’ve spent a lot of money on getting this game ready and borrowed a lot of money from these investors, when you release the game, the investors expect to see returns. If your game gets a lot of users and a lot of subscriptions right away, your investors will be happy and you can pay them. But what happens if you don’t hit that number right away? You have a bunch of staff members waiting to get paid. You have a bunch of investors waiting to get paid. You have a bunch of contents that needs to get made because you have to have updates, but you can’t do it because you don’t have enough money, because you didn’t hit that number you were aiming for. And so what do you have to do? One option to get instant money is free-to-play, or selling these items. To get that money so you can pay off your staff, pay off your investors, and start making new content, switching to free-to-play, selling items, and using that money is one way to do it.

So why didn’t Rift or EA with Star Wars do this from the beginning? Why didn’t they start with free-to-play? There’s a reason behind that. With free-to-play, because you’re selling these items, you’ll have months where you sell a bunch of stuff and you make a lot of money in that one month. But it’s all about what happens during that month. Next month, the person who maybe bought $100 worth of items in the last month could purchase nothing at all. You don’t know what you’re going to be getting, and because you don’t know what you’re going to be getting, you can’t plan ahead. You don’t know how much money is coming in. If you can’t plan ahead, then you can’t keep staff, because you don’t know if you’ll have enough money to pay the staff next month.

With a subscription base, if you get maybe 400,000 members, you know that you’re going to have the money from that monthly subscription for the next month. You also know that you’re going to have 400,000 this month, and it’s not going to go down to 200,000 users next month. That type of jump really doesn’t happen with a subscription model. So you know that you’re going to have a steady income. Because you have a steady income, you can plan ahead further. You can make sure you have staff members to create that new content. By creating new content, you’re making the players happy. If they know this game is going to keep creating new content, they’ll continue to pay their monthly subscription fees. So rather than going for the huge $100-million-a-month hit that you might get with the free-to-play model, having that steady income allows us to provide a better product to the players.

Now, you have Blizzard and you have Square Enix. We’re the only two companies in the industry, basically, that are making MMOs with our own money. That gives us an advantage, because where other companies have to get money from investors and have to pay that back, we don’t have a lot of time to build slowly and be able to pay that back. Investors want their returns right away. With Square Enix and Blizzard, because we’re putting our own money into it, we don’t have those investors to worry about, and that means we can release something and maybe take a little bit of a hit at the beginning, but as long as we’re increasing the amount of people we have, then we’ll get that money and make the players happy. We’ll get into that cycle I talked about before, where we’re creating good content and have that steady income to keep the cycle going.

With version 1.0, even though we call it a failure, we still had a user base. During the time that we were developing this game, 2.0, we were able to increase the amount of subscribers threefold as well. Again, it takes time. It takes showing the users that we’re really into this and giving them that new content. But we’re able to see a rise there. That’s what we’re looking for in this. Again, we’re not saying—The market didn’t change. It’s that there are two different types of models. Choosing the model that’s right for your product and being successful with that is what’s important. We believe that the bigger the game, the larger the scale of the MMO, it’s going to be better for the game if it’s on a subscription model.

That’s why you see a lot of companies that chose the subscription model, that wanted to do what we were doing, but were forced to free-to-play. They didn’t go to free-to-play by choice, because if that was the case, they would have gone free-to-play at the beginning. They’d develop it for free-to-play, not full subscription, instead of being forced to go free-to-play. We hear a lot of people saying, “Star Wars is free-to-play now, it’s great!” But then you ask them if they’re playing free-to-play Star Wars and they say, “No, not really playing it.” Everyone talks about how great it is that it went free-to-play, but then you ask around and really, there aren’t that many people who are playing it since it’s gone free-to-play. If you spend all that money on a game ,release it, and it’s filled with bugs and you don’t have enough time to do your updates, people will leave. Players need that new content. Not being able to provide it is fatal. If they were able to produce as much content as players wanted, then people would have stayed there. We don’t really believe it’s a problem with the business model. It’s how that’s handled.

Yoshi dropping the hammer on Bioware lol It's true though, as awesome a leveling experience as SWTOR was, the combat just wasn't compelling, and there was a pretty weak endgame. Lost interest pretty quickly after a few characters worth of running around.

When he speaks in detail about subjects like this you can tell he's a smart gamer, and not just another suit trying to pump out a game. Love the guy.

However it hamstrings any motivation on their part ot move to a Free to Play model. The difference here is that they do not need a quick return on their investment. Even if they keep a minimum sustaining base, they'll create enough revenue to make content that can draw more in and sustain them further, or make game changes that amount to that.

Now, that's not as to say 1.0 managed to do that in any means. You have to meet the baseline out the gate.

There's no attraction for them to go free to play or buy to play. It provides to unstable of an income to sustain the game at this point. It may not be a direct 'no we'll never do it' but it most defiantly rules out the vast majority of situations that would justify switching models.

"We spent out own cash, so we aren't beholden to investor returns. F2P is a quick means of meeting investor's demand for a return. We have no reason, therefore for a F2P model."

It doesn't rule it out, however.

I would say it DOES rule it out.

It's not only that they don't need to pay back investors, but that they WANT the steady income from a P2P model so they can focus on content, and that they believe and have proven that steady income is better for the customers, and the developers, because they can constantly add content with dependable income.

F2P is a product of our current culture, where consumers want to gorge on content (movies, games, apps) for free or next to free, use it to death, toss it in the trash and yell out "Next!" There is no loyalty or concern at all on the part of the consumer. I can almost guarantee that other than the "whales" who do spend big, very few people spend consistently each month, so a company's income can fluctuate wildly. It would be exactly what a CEO would want to avoid, and like he said, F2P was the last ditch effort to save those games, or they were shutting down. I personally never spent a dime on F2P games, and its annoying as hell to have to deal with a cash shop. We get enough "advertising" as it is in real life, be it from Google, Facebook, TV commercials, and the like. Please Yoshi, NEVER go F2P.

I hate that it's called "Free to Play". When sometimes so much of a game is put behind a pay wall.

When I see a game going to F2P, I automatically think I don't want to play it and that the game is a failure and not worth my time.

Did people rate him down because of the way he worded this? I agree with him but I would word it different.

When I see free to play I see... Come play me. I'm so pretty and I have fun content for you to play. And when you get to level 10 (of 50) you will have to buy Gear X, Armor Y, Item G. Oh, I'm sorry, that item needs this item and you have pay for it too. Well, you can buy this if you want and it will help so you don't have to buy item X and Y but having those will make it easier. So, just buy all three.

Its a bait and switch. Not really but you can't have true fun unless you're paying for the items and I don't want to pay for items. I also see F2P and I think of the above. Its not always like that but its not, not like that either.

I hate that it's called "Free to Play". When sometimes so much of a game is put behind a pay wall.

When I see a game going to F2P, I automatically think I don't want to play it and that the game is a failure and not worth my time.

Did people rate him down because of the way he worded this? I agree with him but I would word it different.

When I see free to play I see... Come play me. I'm so pretty and I have fun content for you to play. And when you get to level 10 (of 50) you will have to buy Gear X, Armor Y, Item G. Oh, I'm sorry, that item needs this item and you have pay for it too. Well, you can buy this if you want and it will help so you don't have to buy item X and Y but having those will make it easier. So, just buy all three.

Its a bait and switch. Not really but you can't have true fun unless you're paying for the items and I don't want to pay for items. I also see F2P and I think of the above. Its not always like that but its not, not like that either.

Well, clearly I don't understand how the rating system works here. He was Default while I post and get Decent. So, since I have got default, I assumed people rated me down, which was the case for him. OK, so, he just has a default because he is... new poster?

Meh, I just didn't think it was fair if he was rated down because it appeared like he was bashing all F2P games just because they are F2P when clearly some are very good, just they are F2P.

Don't make me look more crazy than I already do! Ill come find you in the Beta and keep inviting you to my party and then disband it, only to re-invite you and say it was a glitch, then do it again.

BTW, I loved this article. It shows just how smart of a business man he is. It also shows that he plans on keeping this game going for the long run. Good for him and good for us!

Well, clearly I don't understand how the rating system works here. He was Default while I post and get Decent. So, since I have got default, I assumed people rated me down, which was the case for him. OK, so, he just has a default because he is... new poster?

Meh, I just didn't think it was fair if he was rated down because it appeared like he was bashing all F2P games just because they are F2P when clearly some are very good, just they are F2P.

His base Karma is default. Each posts starts with the users' overall base karma, not at a Scholar level.

I hate that it's called "Free to Play". When sometimes so much of a game is put behind a pay wall.

When I see a game going to F2P, I automatically think I don't want to play it and that the game is a failure and not worth my time.

Did people rate him down because of the way he worded this? I agree with him but I would word it different.

When I see free to play I see... Come play me. I'm so pretty and I have fun content for you to play. And when you get to level 10 (of 50) you will have to buy Gear X, Armor Y, Item G. Oh, I'm sorry, that item needs this item and you have pay for it too. Well, you can buy this if you want and it will help so you don't have to buy item X and Y but having those will make it easier. So, just buy all three.

Its a bait and switch. Not really but you can't have true fun unless you're paying for the items and I don't want to pay for items. I also see F2P and I think of the above. Its not always like that but its not, not like that either.

Nobody rated him down...

Yeah I am automatically default because many years ago(I think 2006) I roamed into the asylum. I came out battered and bruised.

I just personally do not like F2P. When the developers can put some parts, or any parts behind a pay wall that could be and most likely are important to a game and it ends up costing more than a monthly subscription anyways that just ruins my attitude toward that game.

I guess I could see where F2P is good for people that want to play many different MMO's at once, and aren't invested heavily into just one. For me, I'm different, I just want to play one MMO (FFXIV duh ) with one monthly subscription fee that takes care of my access to ALL of the game and content (besides expansion packs).

I'm really happy to read this by Yoshi P. FFXIV seems like it is going to be the next game to hold me for years to come, and I hope it is.

Great article. I think what Naoki Yoshida was trying to explain, is the exact thing that happened to LOTRO. I was playing FFXI, and started LOTRO as a founder, and loved the game. But after awhile, content, updates, etc.. began to suffer and they went F2P. Now, for me, the game isn't anything like it used to be. I'd much rather cut back on my Starbucks a couple days a month and pay for a game like FFXIV. At least, with my subscription, I know I'm contributing, and will continually receive quality content.

Nothing wrong with subscription models, if the value is provided for the customer.

I've been in Eve for nearly 8 years at this point, and they do allow a form of FtP in that if you can earn enough in-game currency each month, you can buy 30 days of time. (currently approximately $500m ISK, usually a bit less, not that much once you have a few months under your belt)

The stable subscriber base keeps them funded, but one HUGE difference between CCP games and Square... I've never had to pay for a single expansion in Eve. All future content is included in the fee after setting up the account.

I won't mind paying for XIV, and I'm happy to see that the initial entry price is not the full "Off-the-shelf PS game" price either, but if Square is collecting $180x2 a year (at the month-by-month-rate) from us, I expect real value for my investment.

$360 a year =Reloading materials for 3000+ rounds of my largest caliber revolvers (even more of the small caliber stuff), and my wife loves to shoot. It's her escape from handling extreme injury medical claims all day long. (and I mean industrial grinder accidents and worse)

FFXIV is welcome to her money, if for the cost, it provides the level of "release" she needs to keep herself sane in a job that already requires an Iron-hard constitution.

Nothing wrong with subscription models, if the value is provided for the customer.

I've been in Eve for nearly 8 years at this point, and they do allow a form of FtP in that if you can earn enough in-game currency each month, you can buy 30 days of time. (currently approximately $500m ISK, usually a bit less, not that much once you have a few months under your belt)

The stable subscriber base keeps them funded, but one HUGE difference between CCP games and Square... I've never had to pay for a single expansion in Eve. All future content is included in the fee after setting up the account.

I won't mind paying for XIV, and I'm happy to see that the initial entry price is not the full "Off-the-shelf PS game" price either, but if Square is collecting $180x2 a year (at the month-by-month-rate) from us, I expect real value for my investment.

$360 a year =Reloading materials for 3000+ rounds of my largest caliber revolvers (even more of the small caliber stuff), and my wife loves to shoot. It's her escape from handling extreme injury medical claims all day long. (and I mean industrial grinder accidents and worse)

FFXIV is welcome to her money, if for the cost, it provides the level of "release" she needs to keep herself sane in a job that already requires an Iron-hard constitution.

Edited, Jun 19th 2013 2:29pm by OtosanOokami

Finally another person to rant about eve besides me....

To add something though most of the times Eve's expansions are usually fixes ship balances and stuff like that so the majority if you ask me shouldn't even be called expansions.

Yea, "great" isn't the word that comes to my mind when thinking of SWTOR F2P.

Nope, swtor has one of the most restrictive F2P models of all time. You can't do any endgame raids, you can do I think 5 PvP battlegrounds a week, you gain less XP than premium players, limited numbers of inventory, auction house, bank, and character slots, a very low maximum credit amount, limited space missions, and limited gear you can use. I'm sure there's more, that's just off the top of my head.

That's what I really dislike about F2P games, they nickel and dime you to death. That's why I've always just paid a sub fee if available for those types of games.